UPDATE 2-Valeant stock falls as report of criminal probe adds to woes

NEW YORK Aug 11 (Reuters) - Valeant Pharmaceuticals
International Inc shares fell about 11 percent on
Thursday as new details about a criminal investigation into the
drugmaker reignited investor concerns about the company's past
business relationship with a mail-order pharmacy that sold its
products.

News of the investigation, reported by the Wall Street
Journal on Wednesday, was a setback to the Canadian company's
efforts clean up its image, with some in the market concerned it
could face penalties and may have to pay more to borrow as it
renegotiates debt.

After the article was published, Valeant said in a statement
it had disclosed it was being investigated by the U.S.
Attorney's Office in October and that it continued to cooperate
with that probe.

Concern about other investigations, which focused on its
drug pricing and accounting practices, had already cut its share
price by about 90 percent in one year.

The stock had gained 25 percent on Tuesday after Chief
Executive Officer Joseph Papa, who joined in May, outlined a
plan to sell assets, pay down debt and focus on dermatology,
consumer and Bausch & Lomb eyecare.

Lawyers at the U.S. Attorney's Manhattan office are probing
whether Valeant obscured from insurers its relationship
with a specialty pharmacy, Philidor Rx, that helped inflate its
drug sales, the Journal reported on Wednesday, citing sources.

The investigation could lead to criminal charges against
former Philidor executives and Valeant as a company, the report
added.

Laval, Quebec-based Valeant's U.S.-listed shares were down
$2.91 at $24.41. It peaked at $263.81 a year ago.
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